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ECONOMIC REVIEW
Boosting Pak-Iran Economic Cooperation
Groups getting funds from abroad are trying to spoil centuries old relationship
(by SHABBIR H. KAZMI)

Boosting Pak-Iran Economic Cooperation
Historically, Pakistan has lived under the shadow of the United States. The country was not allowed to develop cordial relationship with the other super power of yesteryear, USSR. On the contrary Pakistan's soil was used against it. When USSR attacked Afghanistan a war spread over nearly a decade was fought from the GHQ. Pakistan is still fighting a proxy war as Taliban, friends of past have turned foes of today. While it is a must for the peace and security of the region that Pakistan maintains cordial relationship with Afghanistan and Iran, the first step in this direction will be to understand that the persistent hostility is ruining the three Muslim countries.
During the visit to attend a tri-lateral conference in Islamabad, Iranian President Mahmoud Ahmadinejad offered to help Pakistan in overcoming the present energy crisis. He offered to supply electricity up to 1,000MW and completing Iran-Pakistan gas pipeline on priority basis. According to Iranian sources they have already completed their part of the pipeline and now Pakistan has to complete its part, the sooner it is done the better it will be for Pakistan. Those living under the US influence have been delaying this strategically important project on the pretext that, 1) importing gas from Iran is economically unviable and, 2) precarious law and order situation in Balochistan is the biggest security threat. On top of that the US keeps on threatening Pakistan not to go ahead on the project because of the economic sanctions imposed on Iran.
While Pakistanis fail to understand the US stance, the situation also highlights the duality of the policy of sole surviving super power. India has been asked to quit the project and the reward was supply of nuclear technology for civilian use. On top of that India has been encouraged to construct Chabahar port in Iran as well as road and railway link up to Central Asia passing through Afghanistan. This project enjoys the US blessing because it undermines Pakistan's importance by providing an alternate route to landlocked countries.
Taking a clue from the recent Indian decision to buy oil from Iran and two countries agreeing to trade in local currencies, Pakistan should also follow the Indian footprints and expand trade under barter arrangements/currency swaps. To begin with the two countries can begin barter trade in a few items of strategic importance. Iran should try to sell crude oil to Pakistan at competitive price and in return buy food products. The US and the EU should have no objection on this because a similar arrangement was made to save Iraqis when the Iraq was invaded.
Iran mainly imports rice, cotton and synthetic textiles and clothing products, ships and other floating structures and surgical instruments and exports crude oil, POL products, minerals, steel products, chemicals and plastic and plastic products. However, the share of import from and export to Iran is less than one percent of the total foreign trade of Pakistan.
Boosting Pak-Iran Economic CooperationTrade between the two immediate neighbors does not pose any problems. The two countries enjoy road and railway links. On top of all the distance between Iranian and Pakistani sea ports is also very short, especially from Bundar Abbas and Chabahar ports. Initially oil will have to be discharged at Karachi port because on an efficient oil pier, three of the refineries operating in the close proximity and presence of pipeline to transfer imported oil to mid-country refinery located near Multan. Geographical proximity and presence of rail and road links make movement of goods swift and cost effective.
Though, Iran and Pakistan suffer from common contentious issue of severe balance of payments crisis, they have the potential to meet mutual requirements. However, a big thorn is presence of militant groups in Balochistan adamant at sabotaging the relationship between the two countries. In the past Iran had accused Pakistan for providing safe sanctuaries to various militant groups involved in cross border terrorism, the most notorious being Jundullah. The outfit has already been declared 'banned' in Pakistan because of its involvement in sabotage activities, demanding government and private properties and killing of people.
Analysts fear that many of the outfits are funded from outside with the sole objective of not allowing any development in the largest province of Pakistan, which is rich in natural resources but its people living in subhuman conditions. The grudge dates back to discovery of natural gas at Sui which was supplied throughout Pakistan except the province from where it was extracted. Then came the issue of Gwadar port. It may not be wrong to say that the entire hullabaloo is because the port has been constructed with the help of China.
Till recently, people wondered about who was proving funds and arsenal to the militant groups operating in Balochistan but with a bill tabled in the US House of Representatives by Dana Rohrabacher calling upon Pakistan to recognize the right of self-determination for Balochistan, the cat has come out of bag. The bill stated that the Balochs have the right to own sovereign country and they should be afforded the opportunity to choose their own status. A closer look at the recent uprising in the Middle East and North Africa (MENA) and imposition of new sanctions on Iran are aimed at weakening Muslim countries rich in oil and natural resources.
Whatever may be the objective of the US administration, it is the prime responsibility of the Government of Pakistan to protect the interest of its citizens. The country needs uninterrupted supply of energy products at affordable prices to accelerate GDP growth rate, creation of new production facilities and job opportunities. A payment mechanism has to be developed to stop erosion of foreign exchange reserves and ultimately building more reserves. These objectives can't be achieved without entering into elaborate barter agreement with Iran.
The arrangement will, on the one hand facilitate working of textiles and clothing industry of Pakistan at optimum capacity utilization and, on the other hand, cater to the enormous market of Iran. However, the two governments will have to work very closely and involve their private sectors in boosting trade. With the passage of time new items can also be added in the list. Iran has been enduring sanctions for more than three decades.
The US administration must also keep in mind that its stubbornness is responsible for the creation of anti-US sentiments in many countries. It must also listen to its domestic demands. Now people are saying openly that the US should focus on its own people who are bearing the brunt of prolonged wars and rising cost of energy products. They also ask why the US should work on changing regimes in various countries. The issue has to be dealt with by the people of those countries. The time has come to remove amenities and bring peace to planet earth.


 
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